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UK Public Sector eProcurement

UK Public Sector eProcurement. Sarah Cotgreave EGEE’06 - 26/9/06. Agenda. OGCbuying.solutions Drivers for eProcurement in UK eProcurement Solutions Toolkit Technology Issues Questions. OGCbuying.solutions?. Public sector body, part of HM Treasury in the UK

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UK Public Sector eProcurement

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  1. UK Public Sector eProcurement Sarah Cotgreave EGEE’06 - 26/9/06

  2. Agenda • OGCbuying.solutions • Drivers for eProcurement in UK • eProcurement Solutions Toolkit • Technology Issues • Questions

  3. OGCbuying.solutions? • Public sector body, part of HM Treasury in the UK • Central Purchasing Body helping the UK Public Sector to save money • Setting up Value For Money Framework Agreements by aggregating demand and conducting OJEU procurements • Provides Government wide Managed Services - Government Secure Internet, eCommerce, Energy • Total UK Public Sector spend on goods and services = £125bn ~ €185bn

  4. UK Public Sector eProcurement Drivers – UK Efficiency Review £21.5 billion a year efficiency gains by 2008 £8 billion efficiency gains to come from procurement

  5. 24 Nov 2005 UK Public Sector eProcurement Drivers – European Commission • EU i2010 Ministerial Declaration on “Transforming Public Services” • By 2010: • all EU public administrations will have capability to carry out 100% of their procurement electronically • at least 50% of public procurement above “OJEU” threshold will be electronic

  6. UK Public Sector eProcurement Drivers • Modernising Government • Making government business open and accessible to Small and Medium Enterprises and “Third Sector” • eInvoicing Directive • Sustainability – reducing paper and distibution

  7. Tools in eProcurement Lifecycle ….. Customers choose the tools which give them the biggest benefit – some are free for buyers! Management Information /Aggregation Payment Collaboration / Communicate Specification / Notice Invoice / GPC eSourcing, eAuctions, Receive Expression of Interest Zanzibar, GPC Visa Feedback / MI Best Practice Order Invitation to tender Approval Evaluate Selection /Requisition Negotiate / Reverse Auction Award Content Management Contract Management

  8. OGCbuying.solutions eProcurement Solution Toolkit • Implemented by Sourcing and Outsourcing Services Limited • Uses Commercially available products - easy to use technology • Hosted on internet to avoid technology investment for buyer and suppliers • Hosted solutions scalable for large customer and supplier numbers • UK eGov Government Security accreditation • Support collaboration and aggregation between customers • Achieves time savings in regulated processes • Available to all Public Sector organisations • Access to Best Practice and implementation expertise from OGCbuying.solutions eCommerce team and User Groups • Managed service model releases customer time for operational activities whilst ensuring security of supply and service level achievement

  9. eSourcing(Jun 2004)

  10. Core Services Additional Services eSourcing Managed Service Web based, collaborative tools used by buyers and suppliers to conduct the sourcing process online – 4 modules provided by BravoSolution with additional services • The eSourcing managed service • provides: • compliance with UK Public Procurement regulations • best practice templates • UK Government security accreditation • extensive support • customer implementation toolkit • reduced sourcing costs • reduced risk and audit trails • collaborative working • supplier performance information Mgt

  11. eSourcing Hosting Buyers and suppliers access via customised eSourcing portals over the internet • The managed service means: • no IT investment , implementation, upgrade or maintenance effort • available for immediate deployment and go-live within 4-6 weeks • a helpdesk for buyers and suppliers

  12. eSourcing: Delivering Savings, Efficiency & Value suppliers involved… £10bn 32 Customer’s combined spend 450 - £2bn eTenders run… 11,000 At least 25% typical time improvements…

  13. eAuctions(Dec 2003)

  14. eAuctions Framework 4 suppliers provide systems to negotiate numeric attributes • Transparent Bidding process with ranking of all evaluation components (required by UK law) • Suppliers negotiate against each other to achieve market price at a point in time • Speed up the negotiation process • Drive higher savings than just using tenders • Easy to repeat for regular negotiations • Require clear definition of specification to avoid ambiguity

  15. UK eAuction results Pre-auction value of Goods/Services procured using OGCbuying.solutions eAuction framework contracts since 2003 Amount saved using OGCbuying.solutions eAuction framework contracts since 2003 (22%) £421m £95m Under £10,000 Average cost of running an eAuction…………. £700,000 Average savings from an eAuction……

  16. (Feb 2006)

  17. Zanzibar Service Payment • The Zanzibar Service TM allows government buyers to trade securely with suppliers over the internet • 3 main features: • Hosted eMarketplace connecting buyers and suppliers, containing Supplier “content” allowing search and comparison of goods and services • Pan-Public Sector Data Warehouse • Optional P2P – Online Requisition, order and pay using GPC or e-invoicing Invoice / GPC Receive Purchase to Pay Data Warehouse Order Workflow / Approval Selection /Requisition Content Management Zanzibar Service is a registered Trademark of OGCbuying.solutions

  18. What is different about the Zanzibar Service? Traditional eProcurement environments, have some automated functionality, but still rely on manual processing at key points. Zanzibar provides a fully integrated eProcurement solution where data persists throughout Paper Paper Paper Paper Paper Paper Manual Manual Paper Invoice Paper Invoice Manual Manual Paper Invoice Paper Invoice Purchase Purchase purchase Paper invoice Purchase Purchase Purchase Sourcing sourcing Sourcing Sourcing Order Order order Order Order Order Electronic Electronic Electronic Electronic Electronic Electronic Electronic Electronic Goods goods Reconciliation reconciliation Requisition requisition Approval approval Receipt receipt Electronic Electronic Electronic Electronic Electronic Electronic Electronic Electronic Electronic Electronic Electronic Electronic Electronic Electronic Reconciliation supplier goods Goods invoice / Invoice / Supplier requisition Requisition approval Approval Order order reconciliation content receipt Receipt P Card PCard Content

  19. Zanzibar components Hosted eProcurement solution available to all UK Public Sector Organisations Customers subscribing to Zanzibar get all components A fully paperless procurement process to both suppliers and buyers • A level playing field for all suppliers • Savings in back-office processes • Provides rich information that allows the requisitioner to make value-for-money decisions

  20. Zanzibar System • Single point of access for buyers and suppliers • Lower cost P2P solution for smaller customers • Centrally managed supplier adoption • Suppliers manage own catalogues • Negotiated contract pricing drives value for money • Reduced buyer and supplier process time and cost • Ability to enforce controls and contracts • Access to data about spending patterns, suppliers and demand • A catalyst for collaborative opportunities and benchmarking • Link to marketplace leverages existing ERP investments

  21. Zanzibar Savings Benchmarks PROCESS SAVINGS • Process saving of £41 per fully automated transaction from requisition to payment • Process saving of £6 per transaction for Buying Organisations using currently using eProcurement but not eInvoicing PRICE SAVINGS • Price Savings expected from access to more contracted prices and better Management Information – 2-4% of cost of goods and services

  22. Technology Issues – General • Universal Access – web browser and email account • Interoperability – multiple systems connecting (currently using cXML) • Information security at transactional and aggregate level • Payment security – passing of payment details • Barriers - Registration, Verification and Authentication • Certificates • Digital Signatures

  23. Technology Issues – Grid Computing Review by National Infrastructure Security Co-ordination Centre (3 years ago), noted: • Significant interest – potential to boost innovation in UK where intermittent processing requirement means that investment in dedicated resources is not cost-effective • Risk assessment difficult - processes operate across multiple systems • Mutual Authentication of Partners • Data Integrity • Information Confidentiality • Model of acceptable behaviour for hosted processes

  24. Useful UK eProcurement websites • www.zanzibaronline.gov.uk • www.ogcbuyingsolutions.gov.uk • www.nepp.org.uk • www.purchasingcard.info • www.idea.gov.uk/knowledge/eProcurement • www.ogc.gov.uk • www.buyitnet.org/Best_Practice_Guidelines/e-Procurement/index.jsp • www.capsresearch.org • www.idea-knowledge.gov.uk/idk/aio/70780

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